hemp and cannabis in topicals rdc...this presentation is designed to inform cosmetic manufacturers,...

Responsible Distribution CanadaDistribution Responsable Canada

Hemp and Cannabis in TopicalsRegulatory considerations for formulators

Presentation To: SSC Ontario Chapter | Date: March 10, 2020Presentation By: Dave Saucier, Responsible Distribution Canada

Leaders in Chemicals and Ingredients ~ Chefs de file en Produits Chimiques et Ingrédients

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1. Introductions and participant expectations2. Important Definitions3. Cannabis Act4. Cannabis Regulations5. Other regulatory considerations6. Conclusion


DISCLAIMER

This presentation is provided for information purposes only. RDC will not assume any responsibility for the accuracy of the contents of this presentation. It is the responsibility of the viewer to confirm the accuracy of the information if being used for due diligence and to comply with applicable legislation relating the cannabis and its use in topicals.


This presentation is designed to inform cosmetic manufacturers, importers and ingredient suppliers who wish to explore opportunities in the cannabis topicals market.

Participants will be able to:

Understand the costs and processes to obtain the licenses Understand the licensing regimes Must follow Good Production Practices Must follow Promotion and Advertising requirements Reporting, and Enforcement

Participant expectations


A cannabis topical is NOT a “cannabis extract”

cannabis topical means a substance or mixture of substances that contains or has on it anything referred to in item 1 or 3 of Schedule 1 to the Act and that is intended for use, directly or indirectly, exclusively on external body surfaces, including hair and nails.

Cannabis Act Schedule 1 (Subsections 2(1) and 151(1))1 Any part of a cannabis plant, including the phytocannabinoids produced by, or found in, such a plant, regardless of whether that part has been processed or not, other than a part of the plant referred to in Schedule 22 Any substance or mixture of substances that contains or has on it any part of such a plant3 Any substance that is identical to any phytocannabinoid produced by, or found in, such a plant, regardless of how the substance was obtained

Cannabis Topical definition


Cosmetic Ingredients Hotlist – restriction for hemp derivatives* CAS 8016-24-8 or 89958-21-4 – Hemp seed oil or hydrolyzed see protein

“Cosmetics must not contain an isolated or concentrated phytocannabinoid or a synthetic duplicate of that phytocannabinoid”

Maximum concentration permitted:10 µg/g THC (delta-9-tetrahydrocannabinol), as per the Industrial Hemp Regulations.

Non-viable cannabis seeds, mature stalks stripped of leaves, etc and fibre derived from such mature cannabis stalks do NOT require authorizations.

Hemp seed oil or flour packages must clearly state “Contains 10 µg/g THC or less – Contientau plus 10 µg/g de THC”

* Appears on the Revised in Commerce List (89958-21-4 not on any list – therefore a NEW substance)

Industrial Hemp


Topicals are listed as Item 8 Under Schedule 4 authorizing salesProhibition on sales of products that have not been packaged or labelled in accordance with the regulations

Cannabis Act (S.C. 2018, c. 16): https://laws-lois.justice.gc.ca/eng/acts/C-24.5/

Cannabis Act is an enabling ActStructure of the Act

• 15 Parts• 226 sections• 6 Schedules• 8 Regulations

https://laws-lois.justice.gc.ca/eng/acts/C-24.5/


Regulations under the Act

• Cannabis Act (Police Enforcement) Regulations (SOR/2018-151)• Cannabis Fees Order (SOR/2018-198)• Cannabis for Medical Purposes Remission Order (SOR/2020-9)• Cannabis Regulations (SOR/2018-144)• Cannabis Tracking System Order (SOR/2019-202)• Industrial Hemp Regulations (SOR/2018-145)• Order Designating the Minister of Health as the Minister for the purpose of

that Act (SI/2019-125)• Qualifications for Designation as Analyst Regulations (Cannabis) (SOR/2018-

146)

Cannabis Act


2 schedules

• Schedule 1 – Item 5 – License for standard processing $3,277

• Schedule 2 – Item 5 – the greater of 2.3% of cannabis revenue AND $23,000

Minimum cost to start producing topicals – year 1 = $26,277 + 2.3% of revenue

Cannabis Act – Cannabis Fees Order


16 Parts - 375 sections (as of February 26, 2020)

Important sections:

Part 2 LicensingPart 3 Security ClearancesPart 4 Physical Security Measures

Division 1 for Standard Processing (i.e. cannabis topical)Part 5 Good Production PracticesPart 6 Cannabis ProductsPart 7 Packaging and LabellingPart 11 Retention of Documents and InformationPart 12 Reporting and Disclosure

Cannabis Regulations Overview


• You MUST have a license from Health Canada• Process cannabis into finished products, such as topicals

• You MUST have a license from the Canada Revenue Agency to sell cannabis• *Buy and apply cannabis excise stamps to their products• Calculate duty on their products• File their return and send the excise duties collected to the CRA

* Not required for products containing less than 0.3% THC – which would qualify as cosmetics and not cannabis topicals

Part 2 - Licensing


• s7 Pre-licensing requirementsProvide written notice to

a) Local governmentb) Local fire authority, andc) Local police

Other important considerations• s8(1)(b) Class of license will be for Processing• s17(5)(a)(i) Processing License must have an authorization to sell the cannabis topical• Act 69 Must be authorized under a Provincial Act• s18(1) Each shipment must be accompanied by a current copy of Consumer Information –

Cannabis –or obtain written confirmation that the receiver will obtain copies through other means

• s19(1) Must retain the services of a qualified Quality Assurance person (up to 2 alternates)• Assure the quality; Investigate every complaint; and take immediate measures to

mitigate risk• Must obtain the Minister’s approval to designate or replace QA personnel

Part 2 - Licensing


• s32 amend the license

• s33 site plan changes require Ministers approval

• s37(1) Responsible Person and alternate

• s38(1) Head of Security and alternate

• s43 Destruction requires a witness who holds a security clearance

• s46(1) Establish a system for Recall

• 46(2) conduct annual simulation

• s47 Safekeeping during distribution

Part 2 - Licensing


• s50 security clearance for individuals who holds the processing/sales license

• Director or officer of the corporation

• s51 must submit an application

• s52/53 Minister may check background / grant security clearance / revoke

• Criminal background checks

Part 3 – Security Clearances


• s62(1) follow sections 63 to 72 for standard processing license

• s63 site design must prevent unauthorized access

• s64 visual monitoring of perimeter by recording devices 24/7

• s65 intrusion detection system operating at all times – monitor at all times 24/7

• s66 records for detected occurrences

• s67 storage areas must have restricted access

• s68 record of every individual entering and exiting storage areas

• s69 surrounded by physical barrier

• s70 visual monitoring on recording devices to detect illicit conduct

Part 4 Physical Security Measures


• s62(1) follow sections 63 to 72 for standard processing license

• s63 site design must prevent unauthorized access

• s64 visual monitoring of perimeter by recording devices 24/7

• s65 intrusion detection system operating at all times – monitor at all times 24/7

• s66 records for detected occurrences

• s67 storage areas must have restricted access

• s68 record of every individual entering and exiting storage areas

• s69 surrounded by physical barrier

• s70 visual monitoring on recording devices to detect illicit conduct

• Retain for one year plus one day

Part 4 Physical Security Measures


Sections 78 through 92 apply

• Combines GMP and HACCP – similar to Safe Food for Canadians Regulations

• Important definitions

• Acceptable level

• Control measure

• Critical control point

• Sanitary condition

• Requires written SOPs

Part 5 – Good Production Practices


• Requires pest controls

• Management of sanitizers, and non-food chemical agents

• Storage conditions must maintain product quality

• Building must be kept clean and orderly

• Effective surface cleaning

• Contamination prevention

• Prevents the introduction of extraneous substances to the topical

• Adequate system of filtration and ventilation

• Supply of water



• Lighting must be appropriate for the activity

• Fixtures must withstand repeated cleaning and sanitization

• Not present a risk of contamination

• Equipment must be clean, well maintained, prevent contamination and introduction of extraneous substances to the topical

• Prevent and protect the topical against allergen cross-contamination

• Includes conveyances



Sanitation program

• SOPs for effective cleaning

• Building

• Equipment and conveyances

• Handling including health and hygiene behaviours

• Hand cleaning and sanitization stations – adequate number and locations



Quality Assurance program

• Investigations conducted by QA person / alternate

• Implement immediate risk mitigation measures

• Approve all ingredients and packages used to produce topicals

• Approve prior to release for sale all lots / batches

• Maintain temperature / humidity to maintain quality and prevent contamination

• Separate of ingredients from contaminants

• Ensure water quality

• No presence of animals



Quality Assurance program

• Clothing, footwear and protective coverings are suitable and effective

• Conduct identification and analysis of hazards

• Prevent, reduce and eliminate hazards

• Retain documents for 2 years

• Conduct testing to meet the requirements of Section 90 to 92

• Testing for phytocannabinoids

• Either before or after being packaged / labelled

• Test for contaminants to confirm if within tolerances

• Use validated methods – retain samples and records for 1 year



Parts 92 through 98

• Must NOT contain residues of pest control products

• May contain or have microbial or chemical contaminants within accepted tolerances for human use (Schedule B Food and Drugs Act) intended for the cannabis product.

• Must meet maximum residue levels per section 9 or 10 of the Pest Control Products Act

• Maximum quantity of THC or CBD less than 85% or more than 115% of the label quantity or concentration

• Cannot be used in the area of the eye, eyebrows, or on broken/damaged skin

Part 6 – Cannabis Prodcust


Parts 99 through 105

• s101(1) Must NOT contain anything that can cause injury when used for its intended purpose i.e. topical

• Can ONLY contain anything from Item 1 or 3 of the Act i.e. cannabis

• Residues of pest control products registered for use on cannabis and be within MRLs

• Microbial or chemical contaminants generally accepted within tolerance limits for human use

• Maximum quantity of THC must NOT exceed 1000 mg per immediate container taking in the potential to convert THCA into THC

Part 6 – Cannabis Prodcust


PART 7 - PACKAGING AND LABELLING


Parts 105 through 138

Definitions

Expiry date expressed at minimum as year and month that is the end of the stability period

INCI Name has the meaning as in s2(1) of the Cosmetic Regulations

Standardized Cannabis Symbol means the symbol set out in the document of the same name

Part 7 – Packaging and Labelling


• s108

• Be opaque or translucent and uniform colour (not fluorescent) - smooth non-embossed / decorative edges

• Prevent contamination

• Include a security feature / child resistant packaging

• NOT contain more than the equivalent of 30g dried cannabis

• s111 NOT display any brand element

• s112 NOT display any image

• s116(2) NOT include a fold out panel



• s122(1) a bar code may only be displayed once

• s122.3 NOT contain more than 90 mL of extract that is in non-solid form at a temperature of 22 ± 2°C

• s123(1)(c) name and address of license holder

• (i) brand name

• (ii) Lot Number or Lot no. Or Lot or "L"

• (iii) recommended storage conditions

• (iv) packaging date

• (v) expiry date

• (d) WARNING "KEEP OUT OF REACH OF CHILDREN / TENIR HORS DE LA PORTÉE DES ENFANTS"

Part 7 Packaging and Labelling


• S130 (3) Other required information

• Standardized cannabis symbol and health warning message:

• Colour black, minimum 7 points (font)

• Single font type

• White background that extends at least 6 points on all side away from information

• English and French

• Colour can not be fluorescent

• Standardized cannabis symbol must appear in the upper left 25% of the principal display panel

• At least 1.27 cm x 1.27 cm



• S132.15 Cannabis Topical discrete units

• Net weight in grams of the topical

• Number of units

• Net weight in grams in each unit

• Either the quantity of THC in mg or in mg per gram ("total THC per unit")

• Either the quantity of CBD in mg or in mg per gram ("total CBD per unit")

• A list of the ingredients of the cannabis topical

• The identity of the cannabis product in terms of its common name or in terms of its function, and

• The intended use of the cannabis product



• s132.15 Cannabis Topical discrete or non-discrete units

•Net weight in grams of the topical

•Number of units (discrete units only)

•Net weight in grams in each unit

•Either the quantity of THC in mg or in mg per gram ("total THC per unit")

•Either the quantity of CBD in mg or in mg per gram ("total CBD per unit")

•A list of the ingredients of the cannabis topical (by INCI name/chemical or EU trivial name) - English and French <1% in any order

•The identity of the cannabis product in terms of its common name or in terms of its function, and

•The intended use of the cannabis product



• s221 MUST retain documents• s225 for each lot or batch:

• Date of production• Date put into discrete units (if applicable)• Description• Net weight or volume• Lot number• List of ingredients that is to appear on the label• Net weight, volume or concentration of each of the ingredients• Brand name• Date packaged

RETENTION PERIOD IS 2 YEARS

Part 11 Retention of Documents and Information


INVENTORY AND DISTRIBUTION – IF OBTAINED FROM ANOTHER PERSON – FOR INGREDIENTS ALSO

• s226(1)• Name of the person from which the cannabis is obtained• Address• Date on which the cannibis is obtained• Quantity• Description and brand name• Lot number• INCI/common/chemical/CASRN and Lot #




SALES, DISTRIBUTION and EXPORT

• s227(1)• Name of the person from which the cannabis

is sold• Address• Date on which the cannibis is obtained• Quantity• Description and brand name• Lot number• TOPICALS: List of ingredients that appears on

the label INCI/common/chemical/CASRN and Lot #


Part 11 – Retention of Documents & Information


ANTIMICROBIAL TREATMENT conducted at a location other than the site specified on the license• s228(1)

• Description of cannabis being treated• Date and quantity cannabis leaves the site• Name of the person that receives the cannabis• Address• Name of the person from which the cannabis is received after

treatment• Address of the site to which the treated cannabis is returned

after treatment• Date on which the cannabis is received and quanity




SECURITY• s230

• Organizational security plan• Submit to the Minister• Keep updated plans for at least 2 years

GOOD PRODUCTION PRACTICES

s231 keep batch records, maintain a list of brand names – all documents, registries, forms, SOPs supporting sanitation program




SYSTEM OF CONTROL FOR RECALLS• s235

• MUST retain documents for 2 years

GOOD PRODUCTION PRACTICES

s231 keep batch records, maintain a list of brand names – all documents, registries, forms, SOPs supporting sanitation program

KEY INVESTORSs241 key investors names and addresses




s242• MUST be provided in the form and manner specified in the

document:"FORM AND MANNER REQUIREMENTS – Documents Provided to the Minister for the Purposes of the Cannabis Act"

s244• 60-day written notice before making available a new product

• Class of cannabis product (i.e. topical)• Description and brand name• Date on which the product is expected to be available

Part 12 – Reporting & Disclosure


Information related to promotion

s245• The amount of money spent in a give calendar year on

promotion directed at consumers; and type of promotion• The amount of money spent in a given calendar year on indirect

promotion• Reported annually by March 31st



Theft or loss of cannabis

s246• Theft or Unexplained Loss

• Notify police within 24 hours• Notify the Minister within 10 days



Voluntary Recall

s247 Provide the Minister with a document BEFORE commencing a recall:

• Description of the product• Number of each lot, and the lot of cannabis used• The name and address of each person who produced or packaged/labelled the

cannabis• The reason for the recall• Quantity sold or distributed• Quantity remaining in possession of the holder• The number of persons to which the holder sold the product in Canada – and

sales period• The manner in which the recall is to be carried out• Contact info of person responsible for the recall• Provide Minister written report within 30 days with results and preventative

measures

Part 12 Reporting and disclosure


Adverse Reaction

s248 Provide the Minister with a detailed written report within 15 daysAnd prepare an annual summary report that contains a concise and critical analysis of all adverse reactions to the product that the holder became aware of during the previous 12 months.

RETAIN RECORDS FOR AT LEAST 25 YEARS• adverse reaction means a noxious and unintended response to a

cannabis product.• serious adverse reaction means a noxious and unintended response

to a cannabis product that requires inpatient hospitalization or a prolongation of existing hospitalization, causes congenital malformation, results in persistent or significant disability or incapacity, is life-threatening or results in death.



CANADIAN ENVIRONMENTAL PROTECTION ACT


• Circumstances for Granting Waivers Pursuant to Section 147 of the Act, Regulations Prescribing (SOR/2010-138)

• Environmental Emergency Regulations (SOR/2003-307)• Masked Name Regulations (SOR/94-261)• Microbeads in Toiletries Regulations (SOR/2017-111)• New Substances Fees Regulations (SOR/2002-374)• New Substances Notification Regulations (Chemicals and Polymers) (SOR/2005-247)• New Substances Notification Regulations (Organisms) (SOR/2005-248)• Ozone-depleting Substances and Halocarbon Alternatives Regulations (SOR/2016-137)• Persistence and Bioaccumulation Regulations (SOR/2000-107)• Products Containing Mercury Regulations (SOR/2014-254)• Prohibition of Certain Toxic Substances Regulations, 2012 (SOR/2012-285)• Release and Environmental Emergency Notification Regulations (SOR/2011-90)• Storage Tank Systems for Petroleum Products and Allied Petroleum Products

Regulations (SOR/2008-197)

Ingredients and CEPA


Chemicals Management Plan

Domestic Substance List (DSL) Revised in Commerce List

Significant New Activity notices Ministerial Conditions

Section 71 Mandatory Surveys DSL Inventory Update (every 4 years)

List of Toxic Substances Import/Export Controls

Categorization status

Each ingredient in each formulation should be assessed for DSL, R-ICL, SNAc, MC, Toxic and controls status


New Substance Notifications

Substance Type NSN Schedule

Explanation NSN Trigger Quantity (kg)

# days review period

Chemical or biochemical

1 Special Category 1,000 30

4 Not on NDSL 100 5On NDSL 1,000 30

5Not on NDSL 1,000 60On NDSL 10,000 60On NDSL high release/exposure 10,000 75

6 Not on DSL 10,000 75

Polymer of biopolymer

3 Special Category 10,000 309 All polymers 1,000 30

9 Final Reduced Regulatory Requirement (RRR) 1,000 30

10

Non RRR on NDSL or all reactants on DSL/NDSL 10,000 60

Non RRR on NDSL or all reactants on DSL/NDSL high release / exposure

50,000 60

11 Non RRR not on NDSL and not all reactants on the DSL/NDSL 10,000 60

Organisms1 to 5

Dependent on type of organism and containment requirements

VARIES 30-120


Cannabis topical ingredients are not exempt, only finished cannabis topicals are exempted

Ingredient suppliers play an important role by providing:• Properly labeled hazardous products• Transmitting a compliant safety data sheet

Competency based training requirements for ingredient users:• Understand label• Understand the Safety Data Sheet• Understand the hazards of the products being handled and used

Workplace Hazardous Materials Information System


A label must be affixed to the outer and inner packages of cosmetic products to assist consumers make informed decisions. Package contents and potency

Packaging and Labelling requirements


ENFORCEMENT


Part 1 Offences(2) Subject to section 51, every person that contravenes subsection (1)(a) is guilty of an indictable offence and is liable

(i) in the case of an individual who is 18 years of age or older, to imprisonment for a term of not more than five years less a day,(ii) in the case of a young person, to a youth sentence under the Youth Criminal Justice Act, or(iii) in the case of an organization, to a fine in an amount that is in the discretion of the court; or

(b) is guilty of an offence punishable on summary conviction and is liable(i) in the case of an individual who is 18 years of age or older, to a fine of not more than $5,000 or imprisonment for a term of not more than six months, or to both,(ii) in the case of a young person, to a youth sentence under the Youth Criminal Justice Act, or(iii) in the case of an organization, to a fine of not more than $100,000.

Part 2 Ticketable OffencesPart 10 Administrative Monetary Penalties (AMPs)

(2) Instead of paying the amount of the penalty set out in the notice, the person named in the notice may, in the time and manner specified in the notice,

(a) if the amount of the penalty set out in the notice is $5,000 or more, request to enter into a compliance agreement with the Minister that ensures the person’s compliance with the provision or the order to which the violation relates; or(b) request a review by the Minister of the acts or omissions that constitute the alleged violation or of the amount of the penalty.

Cannabis Act


Part 2 Ticketable Offences

(4) For the purpose of paragraph (3)(c), the amount is(a) for an offence referred to in any of paragraphs (2)(a) to (h), $200 plus a victim surcharge, calculated in accordance with subsection 737(2) of the Criminal Code, and any applicable administrative fees; and(b) for an offence in respect of a contravention of a provision that is specified in regulations made under paragraph 139(1)(z.6), the amount specified in those regulations in respect of that offence plus a victim surcharge, calculated in accordance with subsection 737(2) of the Criminal Code, and any applicable administrative fees.

Cannabis Act


Part 10 Administrative Monetary Penalties (AMPs)

(2) Instead of paying the amount of the penalty set out in the notice, the person named in the notice may, in the time and manner specified in the notice,

(a) if the amount of the penalty set out in the notice is $5,000 or more, request to enter into a compliance agreement with the Minister that ensures the person’s compliance with the provision or the order to which the violation relates; or(b) request a review by the Minister of the acts or omissions that constitute the alleged violation or of the amount of the penalty.

Cannabis Act


Provisions for contraventions

• Minimum fines and prison time

• First and subsequent offences

• Criminal liability of corporations, officers and directors

• Offences by employees

Other considerations Occupational Health and Safety legislation

Offences and Punishment


CONCLUSION & THANK YOU

Chemical Supply Chain Management Programs (CSCM)

CSCM Program Rebates for Today’s Attendees:*$100.00 off the tuition cost of attending any of the following CSCM à la carte courses:

Canadian Environmental Protection Act (4 lessons) Active Pharmaceutical Ingredients Importing Safe Food for Canadians Regulations Cosmetic Regulations

*10% off any other CSCM course of choice

Visit: www.cscm-edu.com for information about CSCM diploma programs

Contact RDC directly: 905-332-8777 or [email protected]

http://www.cscm-edu.com/

mailto:[email protected]


Thank you for your attention

For further information, please contact: Dave Saucier – Regional Director, Eastern Canada1160 Blair Road, Unit #1 | Burlington, ON | L7M 1K9Tel.: 905-220-4016 | [email protected]

www.rdcanada.ca